Global stocks rise after jobs report, U.S. yield curve steepens

Fri Feb 3, 2017 4:47pm EST
 
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By Dion Rabouin

NEW YORK (Reuters) - Major world stock indexes rose on Friday, with U.S. equities closing near record highs, as data showed the creation of more U.S. jobs than expected, while President Donald Trump's executive order to review banking regulations boosted financial sector shares.

U.S. nonfarm payrolls increased by 227,000 jobs last month, the largest gain in four months, but wages increased only modestly, suggesting slack in the labor market.

The Dow Jones Industrial Average rose 186.55 points, or 0.94 percent, to close at 20,071.46, the S&P 500 gained 16.57 points, or 0.73 percent, to 2,297.42 and the Nasdaq Composite added 30.57 points, or 0.54 percent, to 5,666.77.

"Continued strong job creation is tempered by the renewed sluggishness in wage growth, raising questions once again about the extent to which the functioning of the labor market has evolved," said Mohamed El-Erian, chief economic adviser at Allianz in Newport Beach, California.

The wages data initially pushed U.S. Treasury yields lower, but they reversed that move after comments from San Francisco Fed President John Williams, who said the Fed can prepare to raise interest rates this year without knowing details of any new U.S. fiscal policies because inflation is firming and the labor market looks good.

The Treasury yield curve was the steepest in one and a half months on Friday.

The fall in yields helped the dollar erase early losses. In late trading it was little changed on the day, headed for its fourth straight weekly loss.

The greenback has struggled amid concerns about the Trump administration's preference for a weak dollar and focus on trade and immigration policies rather than fiscal stimulus and tax reform. It posted its worst January in percentage terms in 30 years.   Continued...

 
Traders work on the floor of the New York Stock Exchange (NYSE) shortly after the opening bell in New York, U.S., January 31, 2017. REUTERS/Lucas Jackson